So this morning I was thinking about purchasing additional shares of INTC on weakness however I wanted to average in at my current cost basis or lower, which is $22.52. The stock is still around $23 so instead of purchasing more stock I decided to sell more puts.
This time I sold an in-the-money put meaning that if my options put contract expired today I would be required to purchase shares of the stock. I sold 1 Nov 17 ’12 $24 Put @ 1.44. This would give me a cost basis of $22.56/share not counting commissions. I also still have another $23 put option with a cost basis of $21.90 in play.
If I end up getting assigned shares from both of these options contracts then I would be adding 200 shares of INTC at a cost of $22.33/share which is still lower than my current cost basis of $22.52.
I’ve updated this trade on my options tab.